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MAIN HEADLINES FROM THIS ISSUE:

The 22nd annual report to Congress on the impact of offsets in defence trade shows that industrial participation involving U.S. defence exporters is now at a historic low. Compiled by the Bureau of Industry and Security, the belated report collects data from U.S. exporters that have associated offset arrangements. The major take-away from the report is that in 2016 offsets involving these exporters declined significantly across a number of metrics, including…

Saudi Arabia’s General Authority of Military Industry (GAMI) has revised the guidelines for localisation proposals for MoD acquisitions. GAMI now divides localisation into direct and indirect projects. Contractors must commit to a localisation agreement for at least 50 percent of the value of the supply contract.

South Korea’s Defence Acquisition Program Administration (DAPA) has introduced new regulations concerning the localisation of weapons systems. The scope of the parts subject to localisation has expanded from import substitution to a broad range necessary for domestic production and performance upgrades.

Armscor has amended its Defence Industrial Participation (DIP) guidelines to boost the prominence of SMEs and black-owned enterprises. Defence contractors must put all of their offset obligations into Black Economic Empowerment (BEE)-compliant, Black-Owned, or Enterprise and Supplier Development (ESD) businesses.

R.R. Thakur, the Officer on Special Duty at India’s Defence offsets Management Wing (DOMW), said that vendors will be allowed to migrate from older Defence Procurement Procedures (DPPs) to the latest version. He said new offset rules will be published within one to two months.